Search age:

Search in:

Bank of Qld hopeful of earnings recovery

Bank of Queensland is optimistic about a recovery in its home state's housing market and increasing earnings.

Chairman Neil Summerson told shareholders at the bank's annual general meeting on Thursday that the Queensland economy had stabilised but remained subdued.

However he said the bank was seeing some early indications that property values were on the rise.

"With borrowers better able to meet their mortgage commitments as a result of successive interest rate reductions, including that of last week, we have reason to be optimistic about recovery in the important housing market," he said.

Advertisement

Bank of Queensland in October became the first Australian bank in two decades to post a loss.

The bank suffered a $17 million loss for its 2011/12 fiscal year due to $401 million in costs from unrecoverable loans linked to BOQ's exposure to the struggling property market in Queensland, where 60 per cent of its loans are written.

Mr Summerson said while the Australian economy's performance was patchy, the bank expected to bounce back from its losses.

"...we are expecting to deliver growth in top and bottom line and after the first three months of this financial year we are comfortably meeting our internal targets," he said.

Chief executive Stuart Grimshaw said the bank's asset growth was in line with expectations and margins within the target range.

"Expense growth is contained and with regard to bad and doubtful debts, new problems and write-offs are in line with internal estimates," he said.

Mr Grimshaw said competition among banks to attract deposits from customers was putting pressure on margins and net interest income.